Harare City Council was forced into explaining how the council used a US$144 million loan facility from the China Export and Import Bank for the rehabilitation of water infrastructure and sewer treatment plants.
This came as the Local Authority’s clerk, Hosiah Chisango, who appeared before a Parliamentary Portfolio Committee on Local Government had said that the ongoing currency reforms had resulted in the distortion of the council’s budget. Chisango added that as a result, the council’s operations had been negatively affected.
The Members of Parliament alleged that the council had used the loan facility for the purchase of luxurious vehicles. Chisango, however, dismissed the claims arguing that the subnational government had only received US$72 million which was used to complete phase one of Morton Jaffray and the computerisation of city district offices.
Chisango also noted that the other US$72 million was yet to come and the Finance ministry was following it up. This was not convincing to the MPs who asked for proof that the money was put to good use. When asked why China withheld another payment citing purchase of vehicles with the loan, Chisango claimed that the vehicles were part of the project.
The Clerk added that cancellation of US230 million ratepayers’ debt in 2013 by the then Minister of Local Government, Ignatius Chombo, has worsened the council’s woes. He noted that as the debt was cancelled, the council’s arrears (Zimra $171 million, Harare Municipal Medical Aid Society $17 million, NSSA $2 million, Pension Fund $60 000, etc) were not cancelled.
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